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When using the subjective approach to project analysis, a firm: O must have an all-equity capital structure. O uses the WACC of Firm X as
When using the subjective approach to project analysis, a firm: O must have an all-equity capital structure. O uses the WACC of Firm X as the basis for the discount rate for a project under consideration by Firm Y. assigns discount rates to projects based on the discretion of the senior managers of a firm. O allows managers to randomly adjust the discount rate assigned to a project once the project's standard deviation has been determined. O applies a lower discount rate to projects that are financed totally with equity as compared to those that are partially financed with debt.
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